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Zacks Analyst Blog Highlights: Research In Motion, Ltd., Eli Lilly and Co., Cosan, Ltd., ENSCO International, Inc. And Tejon Ranch Co.
Thursday, October 02, 2008 4:18 PM
Symbols: CZZ, ESV, LLY, RIMM, TRC
(Source: BUSINESS WIRE)trackingZacks.com

Mark Vickery

Web Content Editor

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Visit: www.zacks.com

Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Research In Motion, Ltd. (Nasdaq: RIMM), Eli Lilly and Co. (NYSE: LLY), Cosan, Ltd. (NYSE: CZZ), ENSCO International, Inc. (NYSE: ESV) and Tejon Ranch Co. (NYSE: TRC).

Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=4579

Here are highlights from Wednesday's Analyst Blog:

RIMM's New Target: $100

Research In Motion, Ltd.'s (Nasdaq: RIMM) second quarter fiscal 2009 financial results were slightly below our estimates. The company also revised earnings estimates lower for the next quarter as it believes the ongoing economic slowdown, increased competition, and delays in product launch may result in more conservative levels of earnings growth.

RIMM is currently trading at 17.3x P/E using our fiscal 2009 earnings estimates. This is at a premium over S&P 500 average, but at a discount to its peer group average. Our six-month target of $100 is based on 28x P/E our fiscal 2009 earnings estimate and supported by the company's technological superiority and market share position.

Eli Lilly with Issues to Address

Indianapolis-based Eli Lilly and Co.'s (NYSE: LLY) leading product is Zyprexa, a treatment for schizophrenia and bipolar disorder. Zypadhera, the trade name in Europe for the long-acting formula of Zyprexa, was recommended for approval by the Committee for Medicinal Products for Human Use in September. We expect to hear back from E.U. regulators within the next few months.

Although we believe the underlying fundamentals of the company remain solid, the recent pipeline setbacks and lack of clarity surrounding antiplatelet drug, Prasugrel will likely limit the upside to the stock. We also believe that sales of Zyprexa will begin to decline in 2008 as generic Risperdal eats into market share. We see little movement in the stock until the above issues are addressed. We rate the stock a Hold with a $47 price target, representing 11.9x our 2008 EPS estimate of $3.95.

Brazil's Cosan Downgraded to Sell

Sao Paulo, Brazil-based Cosan, Ltd. (NYSE: CZZ) is one of the world's largest producers of sugar and ethanol. The company is benefiting from Brazil's economic growth and increasing demand of ethanol worldwide; however, this environment will be negatively impacted by the economic crisis in the U.S. Cosan posted weak first- quarter results.


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